INVENTORY MANAGEMENT AT NIKE
Nike enjoys a strong brand, well-managed distribution processes and a compelling product offering. However, with new competitive entrants with better service and lead time, and even fashion brands moving into their market space, supply chain excellence has been elevated in the past few years, and is viewed as a competitive weapon.
In meeting the major object of improving customer satisfaction, this supply chain transformation is focused on the customer meeting customer product requirements, improving customer relationships, improving requested delivery
Several overarching principles of Nike's supply chain transformation include:
focus on the vital few prioritize investments aligned with business strategy and return
simplify end-to-end: drive out waste & complexity from the process first, then enable
avoid customization: standardize solutions to improve processes
copy-paste companywide: replicate best practices across business units, regions and brands
lead the change: invest in project & transition management
accelerate the pace: respond quickly to new business needs
deliver business results: finish what we start through business benefits achievement.
Nike has been designing all of their products in-house since it launched its own name branded shoes in 1971. Nike employs 400 people for the design and development of footwear, apparel, and sports equipment located at headquarters in Beaverton, Oregon. Globalization has led Nike to understand that different countries have other performance desires. Such as in Japan where runners prefer shoes lighter and with a lower profile to the traditional designs made by Nike. As a result, Nike plans on opening a research and design department in Japan. Developing foreign markets may require more than American based designs to satisfy public expectations resulting in Nike having to consider designing internationally
The manufacturing plant produces a set of samples with the real materials to be sent back to headquarters for final approval. The approval consists not only of the samples, but consideration of the entire seasonal product lines mix, redesigns and prices. After approval, the plant begins to commercialize the product for mass production that includes scaling to all the required sizes and the development of the volume production process. After all the processes have been determined, the manufacturer orders materials needed for production based on Nike's forecasts
There are many limits and vulnerabilities with this strategy. Nike accepts all "future" orders without considering their manufacturers production capacities and promises delivery within one month of requested delivery date. Nike attempts to remedy this flaw by ordering their manufacturers to produce up to...